The
implementation progress of Operational Programme “Transport” (OPT) was
discussed twice within one week in December in Sofia. On 9th and 10th December
the Deputy Minister of transport, Ivaylo Moskovski, headed the ninth session of
OPT Supervision Committee.

It was decided to transfer EUR 60
million from Priority axis 2 (development of road infrastructure) to Priority
axis 1, which makes it possible to utilize these funds for the completion of
Sofia Underground (from Obelya to Nadezhda and from Mladost 1 to Tsarigradsko
shoes) and the procurement of new rolling stock.

It was proposed that SE “Port
infrastructure” should be rendered beneficiary under Priority axis 3
“Improvement of intermodality in passenger and freight services”. The so called
Super Burgas project is to be funded under this axis. SE NRIC reported a 36%
completion of the railway project “Svilengrad – Turkish/Greek border”. It was
announced that the request of Holding BDZ EAD to be included as a beneficiary
under OPT will be discussed.

On 17th December a forum was held in
Grand Hotel Sofia, where the progress in OPT implementation was presented. The
forum was opened by Deputy Minister Moskovski, who stated that by end-2010
nearly EUR 600 million have been contracted which amounts to almost 30% of the
overall budget. Only during the current year a total of EUR 365 million have
been contracted which amounts to 60% of all contracted funding since 2007.
MTITC has validated the application form for Parvomai – Svilengrad railway line
project and has submitted it to the EC for approval (grant funding for this
project is EUR 180 million).

During the forum the beneficiaries
presented the progress achieved within the particular projects. Thus, it became
clear from the presentation of the Deputy Director General of SE NRIC, Krasimir
Krachunov, that the implementation of the project for the construction of a new
railway line between Vidin and Sofia (the tentative cost of which is EUR 2.68
billion) will start during the next programme period of OPT, i.e. after 2015.

The Government validated the Memorandum
with the WB

On 15th December
the Council of Ministers validated a Memorandum for understanding with the
World Bank (WB), which supports the reform in the railway sector. The document
comes as continuation of the Memorandum for understanding to boost the
cooperation in the sphere of infrastructure development in our country, which
was signed in the summer of 2010 by PM Boyko Borisov and World Bank President
Robert Zoellick. The funding, which Holding BDZ EAD can receive as a loan from
the WB, amounts up to BGN 460 million, and the loan for SE NRIC can amount up
to BGN 140 million. The Government undertakes the commitment to establish a
financially stable railway sector which is compliant with European requirements
and keeps a strict fiscal discipline, underlined the transport minister
Alexander Tsvetkov. It is expected that the loan, which will be state
guaranteed, will be finally agreed by May 2011.

According to experts, quoted by the
media, this will be a 20-year loan with 4% interest rate and a 7-year grace
period. Holding BDZ EAD will utilize most of the funding to cover its debts
(currently they amount to BGN 572 million to the banks – mostly to the German
KfW and the Bulgarian Development Bank - as well as BGN 171 million of overdue
liabilities to contractors – mostly, SE NRIC).

In its turn SE NRIC will utilize the
funding from the loan to procure new equipment for construction, maintenance
and reconstruction of railway lines, construction of automated level crossings,
etc. which will make it possible to optimize the personnel that is currently
involved in these activities. In this connection Minister Tsvetkov pointed out
that personnel optimization will be implemented through retirement of
employees, holding down two jobs concurrently without appointing outsiders in
the course of natural personnel turnover, outsourcing of some non-core
activities, etc. According to him, the investment loan will help improve train
speed and security and the objective is to render Bulgarian railways
profit-making by 2013. It is common knowledge that by then the one hundred
measures for reforms in the railways will be implemented and according to the
minister they should produce a financial effect of nearly BGN 83 million.

A Bulgarian – Italian consortium won the
bidding for Plovdiv – Burgas line

The bids for the
rehabilitation of Plovdiv – Burgas railway line were opened on 21st December
2010 in the Head Office of SE NRIC. The lowest bids for the three separate lots
of the project (Mihailovo – Kaloyahovets line section, including the main
tracks at both stations, with an overall length of 21 km; Stara Zagora – Yambol
and Zavoi - Zimnitsa railway line sections, including the main tracks at all
stations along Stara Zagora – Yambol line section, with an overall length of
120 km; Tserkovski – Karnobat and Karnobat – Burgas line sections, including
the main tracks at Tserkovski station, with an overall length of 28 km and all
stations between Karnobat and Burgas with an overall length of 122 km) were
offered by the consortium between the Bulgarian companies TRACE RAILINFRA
(daughter-company of TRACE GROUP HOLD AD) and SK 13 and the Italian company
GENERALE COSTRUZIONI FERROVIARIE (G.C.F. S.p.A.). The consortium offered for
Lot 1 the price of BGN 35 582 812.3 (VAT included), for Lot 2 – BGN
230 287 614 and for Lot 3 - BGN 211 094 561.85. The
technical rating of the bid for the three lots was 27 points.

The main competitor of the consortium
for Lot 1 was the consortium between the Italian company BTP and the Bulgarian
company GLAVBOLGARSTROI, which offered a higher price (BGN 40.685 million) but
received the maximum technical rate of 30 points. For Lots 2 and 3 the main
competitor was the consortium between the Italian company SALCEF and the
Bulgarian company Energoremont. It is common knowledge that 70 % of the weight
during evaluation is given to the lowest offered price and the remaining 30%
are allocated to the technical rating of the design.

This is the third large infrastructure
project which is to be implemented with the participation of TRACE GROUP – the
other two projects are a section of Trakiya highway (for about BGN 138 million)
and two section of Sofia Underground (for a total of BGN 360 million).

Immediately after the selection of the
winning bidder, the transport minister Alexander Tsvetkov stated that a saving
of BGN 110 million has been made for the rehabilitation of Plovdiv – Burgas
railway line. Such is the difference between the lowest financial bid from the
first bidding and the bid of GCF – SK 13 – TRACE (i.e. BGN
316 068 850. 42 compared to BGN 426 229 111 before VAT,
which were offered at the first bidding since the beginning of 2010 that was
cancelled in June last year as the offered price surmounted by about 30% the
tentative price of the project – BGN 366.45 million).

After the implementation of this
project, the trains along Plovdiv – Burgas line will operate at speeds of 130 –
160 km/h (while the current average speed is 80 km/h) and journey times will be
reduced by 1 hour and 10 minutes.

SPENO: the capacity for state-of-art
rail maintenance

Petar GALEV

At the end of
the last year at a seminar in Sofia, the Head of Sales Department at SPENO
International – dipl. eng. Rudolf Koller, presented the capacities of the
company for rail diagnostics and overall maintenance.

SPENO International operates in
countries from all continents and its activities encompass the whole scope of
research, development, production and operation of machines for grinding and
re-profiling of rails and switches, profile measurement and identification of
faults on the rail surface as well as checking for internal faults in the
railhead by means of ultrasound scanning and eddy current inspection.

SPENO continues to develop its know-how
not only in the sphere of rail maintenance but as regards the machine
development as well. Grinding machines and stones are being developed in close
cooperation with the subcontractors Mecnafer (in Mestre, for grinding trains)
and ASI (in Marcon, for the production of grinding stones) in Italy.

In the sphere of rail maintenance SPENO
has deployed its activities over the five continents and renders rails reliable
for all kinds of operational conditions. This includes underground railways as
part of public transport as well as heavy-haul trains and high-speed trains.

SPENO is seated in Geneva, where it was
founded in 1960, and today has over 600 employees all over the world. Customers
of the company services amount to 196 from 47 countries. Currently the company
capacity exceeds 40 000 km of finished grinding work per year.

In the course of its development, SPENO
has introduced a great number of innovations in its sphere of activity. In 1980
the company produced the first road-rail (high-rail) grinding machine for urban
networks. Three years later it introduced the first grinding machine for
switches. In 1985 the company launched the first rail flaw detection vehicle
providing real-time results. In 1987 SPENO introduced the first grinding
machine with dust aspiration.

Today, SPENO remains committed to its
activities in the services field, although the sales of its machines have been
expanding considerably. The company team continues to aspire to introduce
further improvements and innovations and is ready to offer flexible solutions
to the railways around the world.

Eng. Rudolf KOLLER, Head of Sales
Department in SPENO, in an exclusive comment for “Railway transport” magazine:

Our strategy in
Europe is not to sell machines but to offer services for rail flaw detection
and rail maintenance by means of temporary assignment of machines and qualified
personnel in the respective country. When quality rails are maintained well
from the very beginning with the methods we apply, this can make their life-cycle
up to twice as longer. The current condition of most rails in Bulgaria is such
that it requires either replacement or emergency remedial work. Consequently
they will have to be maintained in compliance with contemporary European
requirements and technological achievements. Some 12 years ago SPENO sold a
machine in Bulgaria but I am not convinced that Bulgarian railways managed to
achieve the relevant results with it. This machine is neither used efficiently
enough, nor is it maintained in the best possible way. This situation is mainly
due to lack of funding. Rolling stock operations along bad quality rails
results in serious safety risks and unforeseeable financial losses. As far back
as fifty years ago Europe got convinced in the efficiency of rail maintenance
and Bulgaria should make use of this experience.

In Brief

“Honorable customer of BDZ” award was
handed out

At end-December the “Honorable customer
of BDZ” award was handed out for the sixth year running. The winner in the
campaign is Tihomir Atanasov from Plovdiv who has collected 32.96 points from
buying 9 one-month railway passes for the route Plovdiv – Sofia. He received a
railway pass for free travel along the whole railway network in 2011. Awards
were given to eight other customers of Holding BDZ EAD. The new bonus point
collection programme of BDZ for 2011 started on 10th January.

BDZ reports better financial results in
2010

According to the transport minister
Alexander Tsvetkov Holding BDZ EAD improved its financial result in 2010 by BGN
17 mln, i.e. the company reduced its losses. The losses, incurred by SE NRIC,
were also cut down. In general, the financial results in the transport sector
in 2010 are better than those in 2009 by BGN 25 mln.

The EC permitted the allocation of state
aid for BDZ

In December the European Commission gave
approval for the state financial aid for the rehabilitation of BDZ, amounting
for BGN 249 million. The permission is temporary in order to enable the
Commission to pronounce itself on the plan for restructuring of the national
railway carrier, which should be presented by our country within six months.
The total amount of the state aid is limited to the absolute minimum, necessary
to the railway carrier to perform its activity during the first six months of 2011.
In response, the Bulgarian authorities undertook the commitment to present
within the set deadline a plan for restructuring which will guarantee the
viability of transport services of BDZ.

BDZ reports growth of freight services
in 2010

According to the Executive Director of
Holding BDZ EAD, Pencho Popov, 1.4% more cargo was transported in 2010 in
comparison with 2009. The number of transported passengers is between 30 and 31
million and it is expected that the financial results of the company will be improved
by BGN 15 million in spite of the reduced (by BGN 11 million) subsidies for
passenger services. Pencho Popov underlined the fact that productivity per
employee has been improved by about 10-11 % and the produced ton kilometers of
work have been increased by 1%. Personnel numbers have been reduced by about
10% and the level of average gross salaries has been retained.

Minister Tsvetkov met minister Romani

On 1st December the minister of
transport Alexander Tsvetkov received the Italian minister of economic
development Paolo Romani. The two ministers discussed the development of
Trans-European corridor No 8, the potential for cooperation in the
modernization of Sofia Underground and the tramway system in the capital city
as well as the implementation of important infrastructure projects.

Memorandum for cooperation with China in
the railway sphere

On 7th December the transport minister
Alexander Tsvetkov and the Chinese minister of railways Liu Zhijun signed in
Beijing a Memorandum for cooperation in the sphere of railway transport. The
document envisages the transit traffic via Bulgaria along the Euro-Asian
transport corridors, upgrading of Bulgarian railway infrastructure, development
of quick and high-speed railway transport in our country and the exchange of
experts. The two sides agreed upon the visit of a group of Chinese experts in
Bulgaria with the task to study the options for joint production of wagons and
locomotives in Bulgaria in compliance with EU standards and requirements as
well as with a view to the future cooperation in the sphere of high-speed
railways services. During his visit in China minister Tsvetkov met the Chinese
transports minister Li Shenglin as well as his Turkish counterpart Binali
Yildirim and visited the wagon works CSR Corporation Ltd.

Over BGN 1.8 mln from passenger services
during the holidays

Over BGN 1 800 000 are the revenues of
Holding BDZ EAD from passenger services during Christmas and New Year holidays.
More than 800 000 passengers were served which is about 200 000 more than in
the same period of 2009. Most customers travelled from Sofia to Plovdiv,
Pleven, Varna, Burgas, Vidin, Petrich and Ruse.

Validation of TEN-T project for Vidin -
Kulata line

On 15th December the Council of
Ministers validated the draft Agreement for cooperation in the implementation
of activities within the Trans-European transport network (TEN-T): “Studies for
the development of Priority railway project No 22, No 2207-EU-22070-S” in
compliance with Decision No C (2008) 7574/04.12.2008 of the EC. The project
covers the railway axis Athens - Sofia - Budapest - Vienna - Prague -
Nurnberg/Dresden and on Bulgarian territory it includes the upgrading of Vidin
- Sofia - Kulata railway line. The establishment of the whole axis will improve
links between the separate national transport networks on the basis of common
standards such as the ERTMS systems, electrification, doubling of railway
lines, maximum speed of up to 160 - 200 km/h etc.

Minister Tsvetkov met his Brazilian
counterpart

Within the visit of the Bulgarian
delegation, headed by PM Boyko Borisov, in Brazil on the occasion of the entry
into office of the new president Dilma Rousseff, the transport minister
Alexander Tsvetkov met his Brazilian counterpart Paulo Sérgio Passos. The
two ministers discussed the opportunities for development of bilateral relation
in the sphere of railway transport.

No operational personnel will be made
redundant in BDZ

According to the Chairman of the Board
of Directors of Holding BDZ EAD, Vladimir Vladimirov, it is not envisaged to
make any operational personnel of the railway carrier redundant in 2011. In an
interview for Focus radio he stated that the reduction of personnel will take
place in a natural way, i.e. through the retirement of employees who have reached
retirement age and through restructuring of activities in such a way so as not
to appoint external applicants to positions which have been made vacant after
company employees have voluntarily relinquished the company.

Minister Tsvetkov met the trade unions

On 13th January the transport minister
Alexander Tsvetkov met the leaders of the two major trade unions KNSB and KT
Podkrepa. It was agreed to establish a working group which will elaborate a
plan for financial stabilization and investment programme of SE NRIC and
Holding BDZ EAD.

The parties agreed that no employees of
BDZ and operational personnel of NRIC will be made redundant until the working
group completes its task. Minister Tsvetkov proposed the identification of a
social compensation package for the employees who relinquish the structures of
both companies in result of structure optimization. The meeting was attended by
the Minister of labour and social policy, Totio Mladenov.

Disinfection stations to be concessioned

In 2011 SE NRIC intends to concession
the disinfection stations at the border crossing points, ports and major
cities. Nearly eight thousand wagons were handled in these stations in 2010 and
revenue from these services amounted to over BGN 140 000. This revenue, though,
is insufficient to cover expenses.

The new train timetable entered into
force

The train timetable of Holding BDZ EAD
entered into force on 12th December 2010. Passenger services in 2011 will be
provided by a total of 619 trains, of which 27 are international trains, 91 are
fast trains (among these 19 are fast trains with obligatory seat reservation),
149 are the regional trains and 352 are the suburban trains. The operation
route of some trains is longer and there are newly added trains as well (two
regional trains between Plovdiv and Pazardzhik, two trains between Sofia and
Cherven briag, one train between Shumen and Gorna Oryahovitsa). Due to
continuous works along Plovdiv – Svilengrad railway line there are changes in
the train traffic scheme. As regards Sofia – Pernik line section, trains
continue to operate in regular rhythmic intervals.

SE NRIC expects BGN 90 million from
infrastructure charges

According to the financial director of
SE NRIC, Joanna Dimitrova, the company expects revenues of BGN 90 million from
infrastructure charges in 2011. The annual subsidy for SE NRIC will amount to
BGN 127 million and the capital transfer will be BGN 90 million, including the
cofounding under Operational Programme “Transport”. The company will utilize
the loan of BGN 140 million from the World Bank for the procurement of
equipment and facilities to reduce manual labour and optimize its personnel. In
2010 SE NRIC incurred a loss of BGN 16 million which is three times less than
in 2009.

Danube Bridge 2 is 60% ready

By end-2010 60 % of the works on the
construction of Danube Bridge 2 have been completed. It is considered that the
bridge could be ready by end-2011 and thereafter the tracks will be laid and
the road section will be covered with asphalt. Works on adjacent infrastructure
have been completed by 50%, including the construction of 8 road and railway
overpasses.

“Super Burgas” project gets launched in
2011

According to the Executive Director of
“Public Access Zone Burgas” AD, Pavel Marinov, the procedures for selection of
contractor for “Super Burgas” project will get started in January 2011. A
funding of EUR 26 million under OPT has been provided and should be utilized by
2013. After the completion of the first phase of the project, it will be
possible to apply for funding for the whole project, which costs BGN 558
million and includes the construction of a new railway station.